The City of Emeryville has worked to maintain excellent City services and has a well-earned reputation for effective fiscal planning and budgeting. Although Emeryville has demonstrated good fiscal stewardship over the past several years and has been able to balance the budget, the cost for essential services is still greater than existing revenues, due to the economic downturn, and the City is projecting a deficit.

The recession that began in December 2007 has brought about significant declines in City revenues and will result in a $1.667 million reduction for the current fiscal year from what was budgeted and anticipated. Additionally, the State continues to balance its budget problems on the backs of cities and counties. Some recent State budget fixes propose new borrowing, which could cost Emeryville hundreds of thousands.

implemented a hiring freeze and lay-offs of 8% of the City’s workforce;

reduced street sweeping and tree trimming throughout the City; and

froze senior management salaries

These cost cutting measures are expected to save the City approximately $1.3 million; still leaving a gap of $776,000 in the coming year. Without additional revenue, this gap will only continue to increase over time.

The basic costs of providing high quality services and creating vibrant and livable community have increased over time. Although our revenues been strong in the past, the current economic downturn has caused our revenues to decrease, not matching the cost to provide vital City services. In fact, the State’s recurring takeaways and the dramatic economic downturn have both resulted in declining revenues. In Emeryville, our two largest sources of revenue are sales tax and hotel tax. The current recession has had a negative and profound impact on our local budget. Unfortunately, the annual operating deficit will continue to grow given the structural imbalance between revenues and expenditures. While the City does have an Economic Uncertainty Fund, it is expected to be fully depleted in just over 3 years.

Many residents live in Emeryville because it provides a higher quality of life than surrounding cities. In fact, the City has conducted two surveys to assess resident priorities and satisfaction, and over 80% of residents expressed high approval with the City and services. The City has worked to meet the wishes of residents for higher quality of life projects such as additional parks, but these projects increase the City’s maintenance needs. Supporting the services that make Emeryville a great community is important to our quality of life. Emeryville residents and businesses enjoy the benefits of our clean, safe, and well-maintained city.

To further address our fiscal challenges, the City Council has placed Measure K on the November 2009 ballot to increase the current Card Room fee by just 1%. This proposal would not impact the majority of Emeryville residents, but will assist in closing our budget shortfall. The city is also considering at other potential finance measures in the future.

We want to hear your ideas and thoughts about Emeryville’s fiscal challenges. If you would like more information, please call City Manager Patrick O’Keeffe at (510) 596-4371, or email to pokeeffe@emeryville.org.